0 Data Table Direct materials Direct labor Variable manufacturing overhead ........ Fixed manufacturing overhead. 18,500 2,900 1,285 7,100 29,785 $ Total manufacturing costs Cost per pair ($29,785 / 1,850) ...........$ 16.10 Print Print Done 1 Requirements 1. Cool Boards' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,000 of fixed overhead. Prepare an analysis to show whether Cool Boards should make or buy the bindings. 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,500 to profit. Total fixed costs will be the same as if Cool Boards had produced the bindings. Show which alternative makes the best use of Cool Boards's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Print Done Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,500 to profit. Total fixed costs will be the same as if Cool Boards had produced the bindings. Show which alternative makes the best use of Cool Boards's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. (Enter a "0" for any zero balances. Round any per unit amounts to the nearest cent and your final answers to the nearest whole dollar.) Incremental Analysis (a) Make Binding Buy (Outsource) Bindings (b) Leave (c) Make Facilities Idle Another Product Outsourcing Decision Variable Costs Plus: Fixed Costs Total cost of 1,850 bindings Less: Profit from another product Net cost Decision